Black Entrepreneurs and the Fight against Failure





Black Entrepreneurs and the Fight against Failure

The relatively low historical rate of African American entrepreneurship is a well-known fact. Statistics show that for over 100 years the fraction of self-employed blacks has been about one-third that of whites. Studies show that, in 2002, minority businesses increased to 46% from less than 4 million to 5.6 million in a span of five years. This compares with a 14% increase of whites owned businesses to 22.6 million (Tozzi 17). While minority businesses employed only 5% of the private sector workers in 2007, white-owned businesses employed were 45%. White men run their incorporated business at two times the degree of African American men. Despite the gap being satirical, African Americans have the interest of running businesses of their own. Moreover, they initiate business ideas more than their white counterparts do. Despite the entrepreneurial talents, white men run their incorporated business twice the rate of African American men.

Due to the historical disadvantage most African American men, particularly those who are male have challenges establishing businesses and eradicating poverty because of the racial factor and lack of capital. In the 1900s, black men sought self-employment in artistic designs, mechanics or in barbering occupations. However, their effort for self-employment did not thrive because of racial factors and lack of finances. Furthermore, the problem was that businesses are likely to halt in a few years’ time (Shane 1). In the earlier days, black men were freed slaves and their reputation in society was low. Although they made efforts to start small businesses, they did not succeed well. Various factors have been identified as to why black entrepreneurs do not succeed. These factors include lack of finances, poverty, lack of initiatives and role models, proper education and social networks. These factors make the whites to be ahead in the entrepreneurial world. Policy makers have targeted minority-lending programs. This is to seek a way to close the gap between the businesses owned by blacks and whites. Efforts have been put in place to help the black businesses succeed.

My business student peers under the management/entrepreneurship concentration are an educated lot who understand the diversity of business and the statistics of the racial differences in employment and business. The students have similar warrants to the ones that I have about the reasons why blacks do not succeed in business ownership. However, many of these people believe that blacks fail because they have a limited scope of customers. It has been established that black businesses rely on black customers to succeed. The blacks dislike the existence of other black businesses. They do not value quality products for blacks but want products from filthy Asian stores. They have double standards, and are dishonest and that is why they fail in business (Nassif 1). Another position according to Nassif is that blacks do not like seeing other blacks succeed in business.

Poverty is an issue that affects most black people. Parents tend to raise their children in the same way as they were raised. For this reason, children grow with a false sense of identity that there were meant to fail in business and whites do better than they do. According to Jencks and Phillips, the success of an entrepreneur is affected by the experience that they learn from home. This means they do not learn how to run a business. Nonetheless, some children are determined to succeed under all odds. They work hard to fight poverty and have a motive of success. There are necessary tool that bring success in individuals. For instance, proper parents who support a person and believe their children can it. Additionally, fighting the historical setup that blacks cannot it in life. The necessary tools are important as they create a drive for success. The learning of equity also makes someone be determined for success (Fairlie and Robb 1).

Most black entrepreneurs start in poverty but one notable thing about all of them is they never lost track on their goal. They knew how to connect to key and important people and therefore network themselves. They set four entrepreneurial plans such as spotting an opportunity, assessing the opportunity and the correct action to take. After that they select the best criteria of establishing the opportunity, finally they execute the opportunity and this demonstrate their level of uniqueness. The entrepreneurs identify themselves with key people in the society who help them grow towards their dreams. African American owned businesses lag behind in profits, sales, employment, and survival probabilities than whites because of family business backgrounds. African American business owners have disadvantaged family business backgrounds compared with whites. African American businesses are not likely to have had a self-employed owner prior to start the business. Moreover, the business owner is less likely to have worked in the family member’s business compared to whites.

Trans-generational wealth is defined as the continuous stream of wealth with spans of generations. African American does not experience this wealth, as families die poor without the adequate savings. Trans-generational creates a material concept for the well being and security of future generations. To boost self-employment among the black men should be sustained to reach this wealth and create a culture of black ownership. Many blacks are successful today and come from a poor background. Some of them had to work their way up to complete school and get a good life. They struggled and we are all aware of their stories and history. These people include studio owners, music artists, clothing designers, company founders and executives among others. According to Vershawn, racial differences were significantly evident between white and black teachers and students. This does not mean that race can make someone not succeed. Today people from minority groups are emerging successful after facing many struggles through life. These people serve as role model in the society. For example, Kimora Lee Simons, Daymond John founder and C.E.O of FUBU, Oprah Winfrey, Shellye Archambeau, Metric Stream and Caroline Robinson Jones founder Caroline Jones, Inc. among others (Black Entrepreneur Profile 1). They did not all come from wealthy backgrounds.

Probably mentoring black entrepreneurs might serve as a way of fighting this black entrepreneurship. They are various measures that can be taken to fight this failure. First, entrepreneurs can be taught on how to amass capital. Capital forms the foundation of a successful business. The second measure can be educating black males how to network. Successful businesses have strong networks, which serves as a sustainable measure of ensuring survival of a business. The third way to mentor the blacks is ensuring they have the knowledge of who they are and their capabilities. They can be taught that the opinion society has about them is not important and achieving one dream is one of the moves to establish a better self and success in life.

One factor that makes black businesses fail is lack of finances. There is a significant difference in wealth between whites and blacks. Most entrepreneurs finance their businesses from personal savings and personal borrowing. A person’s net worth has a huge impact in determining how real a new business dream can get. The ordinary black American is poorer than a white person is. According to Shane, a common black household has a net worth of $15,500 compared to $130,600 for an ordinary white (1). This is a clear indication that only a few interested African Americans have the capital to start a business compared to the not interested whites. Additionally, only small fractions of African Americans get loans to start up a business. This is because the loan programs have not considered the entrepreneurial gap between the races. Furthermore, several African Americans do not qualify for a loan if they do not have adequate collateral. It is difficult for any new business to withstand debts. Borrowing is a significant risk because the business has to be stable to start paying debts (Doron and Fisher 1).

The society has termed African American entrepreneurs as unlucky in business. This is because of the factors that interfere with their success in business. These factors are things that are sometimes not their fault. Lack of enough wealth and inability to access credit is something that cannot be termed as their fault. The society has left them weaker than their white counterparts. Most of the African Americans have a background of poverty and neediness. The increasing trend in the business ownership of blacks is an indication that African Americans could be catching up with the whites (Shane 1).

However, they still have a lot to do because of other underlying factors that hinder their success. A number of reports have indicated that African Americans record the highest amount of unemployment. The rate of unemployment among the African American race is devastating. However, it is the reason as to why many blacks are venturing into entrepreneurship. Many company employees have been reclassified as contractors hence rendering freelancers because of lack of employment (Farlie and Robb 1). Firms are moving towards avoiding paying insurance and other benefits to employees on a contract job. This causes many workers to be pushed into business ownership. Business ownership is a form of self-employment and has become inclusive of many unemployed blacks in the country.

Despite statistics showing that black owned businesses are on the rise. In terms of numbers, more white owned businesses are created than black owned operations. An indicator shows that African Americans are interested in running their own businesses. The problem is that most businesses established last year are gone. However, there is hope because mentorship of black entrepreneurs is on the rise. Moreover, the government is supporting them by establishing projects that will make the blacks have capital. The role models in the society are educating the blacks that business ownership success is a matter of hard work, determination and strategic planning and organization and most importantly to believe in their talents and fight the historical ideologies.

















Annotated Bibliography

Black Entrepreneur Profile. Latest Black Executive & Entrepreneur Profiles. Web. November 5, 2013. The source is a black entrepreneur’s profile that was published in 2013 by It provides a list of successful black proprietors who are as successful as whites and even more. This article is relevant to the study because it offers proof that there are successful business owners among the African American community.

DeSilver, Drew. Black unemployment rate is consistently twice that of whites. “Pew Research Center”. August 2013. Web. November 5, 2013. Drew Desilvers is the author of this article, which was published by the Pew Research center in the year 2013. The article discusses the unemployment rate among the blacks that has consistently been twice higher than the white’s unemployment rate. The rate has been high for the past six decades. This article is relevant to the discussion because it offers information on the factors that contribute to the lack of success in business.

Doron, Scott & Fisher, Elaine Rideout. Black Wealth/ White Wealth: An Issue for the South. Black Enterprise, n.d. Web. November 5, 2013. Doron and Fisher are the authors of Black wealth/white: an issue for the south. It was published by the Black enterprise although the publication date is not defined. This article discusses the importance of wealth in a household. Wealth is vital for starting a business and sustaining it. This article is relevant in that it defines the differences in wealth among the whites and blacks.

Fairlie, Robert W. & Robb, Alicia M. Why Are Black-Owned Businesses Less Successful than   White-Owned Businesses? The Role of Families, Inheritances, and Business Human Capital. IZA Discussion Paper No. 1292, September 2004. Web. November 5, 2013. The article is titled Why are black owned businesses less successful than the white owned business? It is an article published in 2004 by IZA discussion papers. This paper discusses the role that family as role models and mentors, inheritances and business human capital plays in business ownership. It is relevant to this discussion because it provides the reader with information that enhances the discussion on why black businesses fail while whites succeed. The information is centered on explaining how a family that has a business and children who work in the business molds a future entrepreneur.

Jencks, Christopher & Phillips, Meredith. Chapter One: The Black-White Test Score Gap. The Brookings Institution, 1998. Web. November 5, 2013. The black-white test score gap is an article written by Jencks and Phillips. It was published in 1998 by the Brookings institution press in the New York Times. It discusses the intelligence and aptitude test of blacks and whites in various subjects like mathematics, reading and vocabulary. This article provides information on how African Americans are innately less intelligent than whites are. However, when put in similar learning and living environments, the gap shrinks.

Nassif, Khadija. If you’re a Black Business Owner Who Wants to Succeed, Leave. The African-American Consumer Behind. “The Sojourners Passport”. 2013, November 5. Web. Nassif Khadija is the author of the article published by the sojourners Passport in 2013. It discusses the reasons why many black business owners have not succeeded in business. The author blames fellow black people on the failure of other businesses because of jealousy and poor support. This article is relevant to the study because it provides information that proves blacks fail to succeed out of their own fault.

Shane, Scott. Closing the African-American Startup Gap (Opinion) Scott Shane. Entrepreneur, November, 2012. Web. November 5, 2013. This article by Scott Shane provides the basis for this discussion. It is an article published in 2012 by the Entrepreneur online magazine. It discusses the statistics of the trend of business ownership failure among the African Americans. This article is relevant to the discussion because it gives a background for the study on reasons why African Americans fail in business.

Tozzi, John. Minority Businesses Multiply But Still Lag Whites. Bloomberg Business Week, July 2010. Web. November 5, 2013. Tozzi John is the author of the article about Minority businesses multiply but still lag. An article was published in the year 2010 by the Bloomberg business weekly. It discusses reasons why African American start businesses in high numbers and they keep multiplying, but fail after a few years. This article is important for the study because it provides proof that African Americans do start more businesses than whites do.











Works Cited

Black Entrepreneur Profile. Latest Black Executive and Entrepreneur Profiles. 2013, November 5. Web

DeSilver, Drew. Black unemployment rate is consistently twice that of whites. Pew Research Center. 2013, August 5. Web. 2013, November 5.

Doron, Scott & Fisher, Elaine Rideout. Black Wealth/White Wealth: An Issue for the South. Black Enterprise, n.d. Web. 2013, November 5.

Fairlie, Robert W. & Robb, Alicia M. Why Are Black-Owned Businesses Less Successful than   White-Owned Businesses? The Role of Families, Inheritances, and Business Human Capital. IZA Discussion Paper No. 1292, 2012 September 2. Web. 2013, November 5.

Jencks, Christopher & Phillips, Meredith. Chapter One: The Black-White Test Score Gap. The Brookings Institution, 1998. Web. 2013, November 5.

Nassif, Khadija. If you’re a Black Business Owner Who Wants to Succeed, Leave the African-American Consumer Behind. The Sojourners Passport. 2013, June 6. Web

Shane, Scott. Closing the African-American Startup Gap (Opinion) Scott Shane. Entrepreneur, 2012, November 2. Web. 2013, November 5

Tozzi, John. Minority Businesses Multiply But Still Lag Whites. Bloomberg Business Week, 2010, July 20. Web. 2013, November 5

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